Attachment A - Citywide Annual Risk Assessment and FY 2027 Audit Plan Report

1 May 29, 2026
City of Palo Alto
Office of the City Auditor
Citywide Annual Risk Assessment
and FY 2027 Audit Plan

Contents
Baker Tilly Advisory Group, LP and Baker Tilly US, LLP, trading as Baker Tilly, operate under an alternative practice structure and are members of the global network of Baker Tilly International Ltd., the members of which are separate and independent legal entities. Baker Tilly US, LLP is a licensed CPA firm that provides assurance services to its clients. Baker Tilly Advisory Group, LP and its subsidiary entities provide tax and consulting services to their clients and are not licensed CPA firms.

INTRODUCTION ............................................................................................................... 1 RISK ASSESSMENT APPROACH .................................................................................. 4 RISK ASSESSMENT RESULTS ...................................................................................... 5 PROPOSED AUDIT PLAN FOR FY 2027 ........................................................................ 9 APPENDICES ................................................................................................................. 11

1 Introduction
Overview
According to the Palo Alto Municipal Code (Section 2.08.130) the mission of the Office of the City Auditor (OCA) is to promote honest, efficient, effective, economical, accountable, and transparent city government. To support this mission, the OCA conducts performance audits and financial and operational analyses of City departments, programs, services, and activities, and is responsible for preparing an annual audit plan for City Council approval.

As the City’s outsourced Office of the City Auditor, Baker Tilly Advisory Group, LP (Baker Tilly) conducted the Fiscal Year (FY) 2026 citywide risk assessment in accordance with Baker Tilly’s agreement with the City. The purpose of the risk assessment was to develop the FY 2027 Annual Audit Plan by identifying and prioritizing areas of greatest risk and opportunity across the City. The resulting audit plan is designed to direct limited audit resources toward activities that provide the greatest value to the City and support effective stewardship of financial, physical, and informational resources.

The City Auditor has the following responsibilities related to the planning and scope of internal audit activities:

Palo Alto City Charter
Article IV Sec. 12 requires the City Auditor to perform the following:
• Conduct audits in accordance with a schedule approved by the City Council and may conduct unscheduled audits from time to time.
• Conducts internal audits of all the fiscal transactions of the City.

Title 2 Administrative Code
Section 2.08.130 requires the City Auditor to perform the following:
• Prepare an annual audit plan for City Council approval. • Identify the preliminary objectives of each audit to be performed, reflecting the purpose of the engagement and a preliminary description of the areas that may be addressed. • Conduct performance audits and perform non-audit services of any City department, program, service, or activity as approved by the City Council.

California Government Code Section 1236 requires cities that conduct audit activities to perform their work in accordance with the standards prescribed by the Institute of Internal Auditors (IIA) or the Government Auditing Standards (GAO), as appropriate. Consistent with IIA Standard 2010, which requires the chief audit executive to establish a risk-based plan aligned with organizational objectives and informed by senior management and governing board input, Baker Tilly conducted a comprehensive assessment of the City’s audit universe, including departments, functions, processes, programs, and activities that may be subject to audit.

Risk Assessment Process Considerations
The annual risk assessment serves as the foundation for developing a risk-based internal audit plan. While risk assessment is a core component of the internal audit process, its scope and complexity vary based on factors such as the maturity of the internal audit function, the organization's risk management practices, coordination with other oversight functions, and stakeholder expectations. Because organizational risks and priorities

2 INTRODUCTION
continue to evolve, the results of the annual risk assessment reflect conditions and information available at the time of the assessment.

The risk assessment process involved identifying, evaluating, and prioritizing risks that could affect the City's ability to achieve its strategic and operational objectives. To gather input, the Office of the City Auditor (OCA) surveyed members of the City Council, the Executive Leadership Team, and key management personnel across the organization. Responses were received from 15 departments and were supplemented by interviews, document reviews, and professional judgment. The results of this process were used to identify areas of elevated risk and develop the proposed FY 2027 Annual Audit Plan.

Consistent with Institute of Internal Auditors (IIA) Standards, the annual risk assessment represents a high-level evaluation of risk across the City's audit universe. In addition, before the commencement of each audit included in the approved audit plan, the internal audit function will perform an engagement-level risk assessment to further define the audit objectives, scope, timing, and resource requirements.

This process helps ensure that
each engagement addresses the most relevant risks and remains aligned with the City's priorities and operating environment.

Throughout the assessment, several organizational strengths were consistently observed, including:
• A strong commitment to public service demonstrated by a dedicated and highly professional management team
• A culture that values efficient and effective government operations • A focus on strategic planning and execution
• Continued investment in innovation and sustainability initiatives • A commitment to continuous improvement and organizational excellence

This report summarizes the risk assessment methodology, analysis, and results and presents the proposed FY 2027 Annual Audit Plan developed from those results.

Audit Planning Considerations
While maintaining its independence and objectivity in accordance with standards, the City Auditor considers a variety of matters when developing the Annual Audit Plan, including but not limited to:
• Risk Assessment – the OCA performed a risk assessment and summarized the results in a separate report (Task #1). Generally speaking, audit activities target high(er) risk areas. The results are shown on the following page.
• Ability to Add Value – audit and advisory projects seek to add value through independent and objective analysis.
• City Council – the City Auditor reports to the City Council and seeks input on audit priorities. • Coverage and Prior Audits – the City Auditor considers prior audits conducted by the OCA, the financial audit, and other audit and consulting reports recently issued. • “Ripeness” and On-Going Initiatives – certain risk areas may be addressed through operational activities, which could mean they are not ripe for audit to add value. • Scheduling – the City Auditor takes into consideration the timing of an audit and other on-going initiatives that directly relate. Putting an undue burden on City staff may exacerbate the risk at hand or other interrelated risks.

3 INTRODUCTION
Audit Activity Type
The OCA will conduct performance audits and perform financial/operational analyses of any City department, program, service, or activity as approved by the City Council in accordance with the Baker Tilly agreement.

Performance Audits
According to the Government Auditing Standards (GAO-24-206786) Section 1.21 and 1.22, page 11-12), performance audits provide objective analysis, findings, and conclusions to assist management and those charged with governance and oversight with, among other things, improving program performance and operations, reducing costs, facilitating decision making by parties responsible for overseeing or initiating corrective action, and contributing to public accountability. Performance audits may include the following four (4) audit objectives:
• Program effectiveness and results
• Internal control design and effectiveness
• Compliance with laws, regulations, and policies
• Prospective analysis

4 Risk Assessment Approach
Baker Tilly’s risk assessment approach this year focused on gathering information from the following inputs:

• Surveying and/or interviewing City Council, Executive Leadership Team members and other key management staff
• Analyzing key documents such as City Council Priorities, budget documents, the annual comprehensive financial report, news articles, and other relevant documents • Updating the risk assessment matrix with the gathered information • Scoring the auditable units (listed in Appendix A) in the risk assessment matrix based on the likelihood and impact of potential adverse events
• Identifying potential internal audit topics for the auditable units with high-risk scores • Summarizing the approach and results for presentation

At the start of our contract with the City, Baker Tilly conducted an initial comprehensive risk assessment in FY 2021 by interviewing all Council Members and Executive Leadership Team (ELT) members to create a risk assessment matrix. Each year, this matrix is updated to redevelop a comprehensive picture of the risk landscape which is continuously changing. For FY 2026, ELT members were asked to evaluate the functions under departments and identify any changes. Members then assessed these functional areas for key risks that could impact operations.

While the risk assessment primarily measures inherent risk (the risk without mitigating controls/factors) for each risk factor, it also considers specific risks based on the above information and the City’s processes, controls, and other factors surfaced through internal audit activities. Using the information gathered, OCA identified risks and determined the likelihood and impact of those risks.

5 Risk Assessment Results
Department Descriptions and Key Risk Areas
When identifying risk areas throughout the City, Baker Tilly worked with City management to identify each department’s key functions and potential risk areas. Based on this input, Baker Tilly identified the auditable risk areas for each department. Below is an overview of the City’s departments and their key risk areas.

Administrative Services
The Administrative Services Department provides financial and analytical support to the City. Departmental functions include finance and accounting, purchasing, administration, budget, real estate, and others.

Key Risk Areas
Financial Management & Reporting
Procurement & Purchasing Controls
Asset & Property Management
Contract, Grants, & Consultant Oversight
Governance, Compliance & Operational
Oversight
City Attorney’s Office
The City Attorney’s Office provides legal services to the City, including providing legal advice and training to City leaders, negotiating on behalf of the City, drafting contracts and other legal documents, investigating claims, and defending the City in litigation

Key Risk Areas
Identification of Legal Risks
Contracts & Legal Documents Oversight &
Advisory

City Clerk’s Office
The City Clerk serves as a liaison between the public and City Council. Office functions include Public Records Act requests, public hearings, local elections, board and commission
recruitments, record management, and others.

Key Risk Areas
Election Administration
Record Retention & Management
Council Meeting Management
Board and Commission Recruitment
Public Records Request

City Manager’s Office
The City Manager’s Office provides leadership to the City departments and is responsible for facilitating City Council legislative actions, managing special interdepartmental projects, and more. The Communications Office is housed under the City Manager’s Office and is the primary correspondent between the City and the public.

Key Risk Areas
Citywide Risk Management
Government Efficiency
Community & Economic Initiatives
Strategic Planning & Governance
Office of Transportation
The Office of Transportation works to enhance quality of life and improve the safety of the users of all modes of transportation.

The Office is responsible for sustainable transportation systems, managing parking, and oversees the City’s traffic and
transportation capital improvement projects.

Key Risk Areas
Transportation Safety Improvements
Parking Management
Operations & Capital Project Oversight
Signals & Traffic Engineering

Community Services Department
The Community Services Departments offers a variety of
services administered through the following three divisions and the Office of Human Services: Arts and Sciences; Open Spaces, Parks, and Golf; and Recreation.

Key Risk Areas
Parks, Facilities & Asset Management
Recreation & Community Programming
Arts, Culture & Education Programs
Contract & Vendor Compliance

6 RISK ASSESSMENT RESULTS
Fire
The Fire Department oversees emergency response such as ambulance transports and fire response/rescue, emergency protection services such as fire prevention, and hazardous materials planning. The department highlights safeguarding the community and compassionate care.

Key Risk Areas
Emergency Response & Fire Operations
Fire Prevention & Hazardous Materials
Management
Emergency Preparedness

Human Resources
The Human Resources (HR) Department is responsible for
recruiting, developing, and retaining a well-qualified and professional workforce. The Department ensures compliance with relevant labor laws, adheres to record keeping practices, and serves as a strategic partner for executive decision making.

Key Risk Areas
Talent Acquisition & Workforce Planning
Compensation, Benefits & Employee
Support
HR Compliance, Safety & Risk
Management
H uman Resource Information System
(HRIS)
Information Technology
The Information Technology Department's provides innovative technology solutions that support City departments. The department oversees IT project management, operations,
enterprise systems, and security services.

Key Risk Areas
IT Governance, Strategy & Project
Management
Enterprise Systems & Technology
Operations
Cybersecurity & Regulatory Compliance
Infrastructure & Network Services
Geographic Information System (GIS)
Library
The Library Department operates five libraries throughout the City, each offering unique resources. The Library provides educational programming, multi-cultural events, and large and diverse book, information and technology resources.

Key Risk Areas
Library Operations & Resource
Management
Community Programs, Events & Cultural
Services
Volunteer & Public Engagement

Office of Emergency Services
The Office of Emergency Services is designed to prevent, prepare for, and recover from various hazards. The Office is responsible for overseeing various risk management programs.

Key Risk Areas
Emergency Preparedness, Continuity &
Risk Management
Educational Programming
Training & Compliance Administration
Intergovernmental & Interlocal Coordination

Planning and Development Services
The Planning Department supports the City in land use
development, planning, transportation, housing and
environmental policies, and plans and programs that “maintain and enhance the City as a safe, vital, and attractive community”.

Key Risk Areas
Planning, Development & Land Use
Services
Building Review, Inspection & Code
Enforcement
Long-Range Planning & Housing
Compliance
Development Services Administration

7 RISK ASSESSMENT RESULTS

Overall Risk Scoring Distribution
Baker Tilly structured the audit universe based on the department/division/program from the budget document and management’s feedback, which resulted in 108 auditable units (Appendix A). We scored them based on the information gathered for each risk factor related to the likelihood, impact, or fraud. Appendix B lists the risk factors, definitions, and scoring method. The maximum score for an auditable unit is 20. The following chart shows the distribution of overall risk scoring.

Police
The Police Department oversees technical services such as dispatch and record management, field services such as patrol and emergency response, and animal control. The Police
Department also places a high value on community relations.

Key Risk Areas
Police Operations & Emergency Response
Investigations, Crime Reduction &
Specialized Response Programs
Communications, Records & Dispatch
Services
Traffic, Animal Control & Community Safety
Training, Staffing & Employee Wellness

Public Works
The Public Works Department is broken into four divisions:

Engineering, Airport, Public Services, and Environmental Services. The Divisions are responsible for a variety of tasks including design and implementation of capital projects, maintenance of City-owned and leased structures, and
management of the solid waste programs.

Key Risk Areas
Engineering, Infrastructure & Capital Project
Management
Airport Operations & Transportation
Services
Environmental Services, Sustainability &
Climate Action
Public Services, Facilities & Infrastructure
Maintenance
Fleet Operations, Regulatory Compliance &
Accessibility Programs

Utilities
The Utilities Department owns and operates electric, gas, water, wastewater and fiber optic services to the City. The City purchases all their power from external sources. The mission of the Department is to “provide safe, reliable, environmentally sustainable and cost-effective services.”
Key Risk Areas
Water, Wastewater & Utility Operations
Gas Utility Operations
Financial Management, Rates & Reserves
Billing & Customer Account Services
Infrastructure & Asset Management
Workforce Planning & Staffing Management

8 Baker Tilly rated the auditable units as follows:
• High Risk – Scores 16 and above
• Moderate Risk – Scores from 11 to 15
• Low Risk – Scores 10 and below

Appendix C of this report lists the risk rated auditable units with a score of 12 or over (out of 20) based on our scoring. The list includes 36 functions rated as High risk (with a score between 16 and 20) and 58 functions rated as Moderate risk (with a score between 11 and 15). In determining the audit activities to be performed in FY 2027, we further evaluated specific risks and functional areas and considered risk-based priorities as well as other factors such as requirements by law or regulation, timing of activities, special projects, and requests from City Council and management. The proposed audit plan for FY 2027 is on the following page.

0 10
20 30
40 50
60 70
2 to 10 (LOW) 11 to 15 (MEDIUM) 16 to 20 (HIGH)
Risk Scoring Distribution

9 PROPOSED AUDIT PLAN FOR FY 2027

Proposed Audit Plan for FY 2027
The proposed audits and special advisory projects for FY 2027 are listed in the table below. These projects were selected from the auditable units assessed as having High or Moderate risk based on the results of the citywide risk assessment. As mentioned in the previous section, in addition to risk ratings, project selection considered factors such as the significance and pervasiveness of underlying processes and controls, prior audit coverage, the timing of related initiatives or non-audit activities, and the potential for the engagement to provide meaningful value to the City through enhanced risk management, accountability, operational efficiency, and effectiveness.

Preliminary objectives have been developed for each proposed project; however, the final scope and objectives will be refined through an engagement-level risk assessment conducted at the outset of each project. The annual audit plan is intended to remain flexible and may be modified during FY 2027 to address changes in the City's operating environment, organizational structure, strategic priorities, risks, systems, or control processes.

Consistent with the City Auditor's established process, task orders will be submitted to the City Council for approval before each project begins. To facilitate timely execution of the FY 2027 audit plan, six task orders have been prepared and are included in Appendix D. The Office of the City Auditor is requesting City Council approval to initiate all six projects during the first half of FY 2027, with work commencing as resources and scheduling permit.

10 PROPOSED AUDIT PLAN FOR FY 2027
Proposed FY 2027 Audit Plan

11 Appendix A: Resumes

Appendices

12 Appendix A: Audit Universe
City Attorney’s Office
Contracts & Legal Documents
Legal Risk & Identification
Legal Representation to City Council & Departments
City Clerk’s Office
Board & Commission Recruitment
Council Meeting Management
Election Administration
Public Records Requests
Record Retention & Management
City Manager’s Office
Citywide Communications & Community Engagement
Citywide Risk Management
Consultant Management
Coordination of Citywide Housing and Homelessness Efforts Economic Development
Ensures Execution of Council Priorities
Government Efficiency
Human Services
Organizational Management
Administrative Services Department
Accounting
Budgeting
Contract and Consultant Oversight
Grant Management
Long-Range Financial Planning
Procurement
Property Management
Purchasing Cards
Treasury, Investment, and Debt Management
Community Services Department
Arts
Children’s Theater
Community Centers
Equipment & Materials Management
Golf
Junior Museum & Zoo
Parks
Recreation
Fire Department
Emergency Response
Emergency Medical Services (EMS)
Fire Prevention
Fire Response/Rescue
Fire Suppression
Hazardous Materials Management
Human Resources Department
Compliance with Labor Laws
Employee Benefits & Workers Compensation
Employee Retention
Human Resources Information System (HRIS)
Professional Development
Recruitment
Succession Planning
Workplace Safety
Information Technology Department
Adoption & Integration of New Technology
Enterprise Systems
Geographic Information Systems (GIS)
Fiber Internet Services
IT Project Management
Office of the CIO

13 Operations
Security Services
Library Department
Collection
Education Programming
Library Branch Operations
Information Resources
Multi-Cultural Events
Technology Resources
Office of Emergency Services
Continuity of Operations Plans
Disaster & Emergency Preparedness
Disaster Mitigation Planning
Education Programming
Interlocal Agreements
Risk Management
Office of Transportation
Parking Management
Safe Routes to School
Signals & Traffic Engineering
Transportation Capital Projects
Transportation Contracts, Grants & Administration
Transportation Planning
Planning and Development Services Department
Code Enforcement
Current Planning
Development Center
Long Range Planning
Inspection Services
Plan Review Services
Police Department
Animal Control
Dispatch
Emergency Response
Investigations
Patrol
Public Safety
Records Management
Traffic Enforcement
Department of Public Works
Airport
Design & Implementation of Capital Projects
Engineering
Environmental Services
Fleet Operations
Infrastructure Maintenance
Public Services
Stormwater
Sustainability & Climate Action Plan Citywide Implementation Utilities Department
Billing
Electric
Fiber
Gas
Power Purchase Agreements
Rate Setting & Adjustments
Utility Asset Management
Utility Reserves
Wastewater
Water
Workforce Management

14 Appendix B: Risk Factor Definitions

Impact

Score Description
Service Delivery
& Operational
Impact
Financial &
Resource Impact
(Illustrative)
Public Trust &
Reputational
Impact
Legal, Regulatory
& Political Impact
1 - Negligible
No discernible
impact or very
minor, easily
absorbed.

Minor
inconvenience; no
disruption to core
services.

Minimal financial
waste (e.g., <
$10,000); no impact
on budget.

No public notice;
minimal internal
concern.

No breach of
law/policy; minor
administrative error.
2 - Low
Minor impact,
manageable
with existing
resources,
minimal
disruption.

Minor disruption to
non-critical
services; easily
rectified.

Low financial impact
(e.g., $10,000 -
$100,000); minor
budget reallocation.

Limited negative
perception internally
or among
immediate
stakeholders.

Minor non-
compliance with
internal policies or
less significant
regulations.
3 - Medium
Moderate
impact, requiring
additional
resources to
manage, some
disruption.

Moderate
disruption to some
core services;
short-term delays
or reduced quality.

Moderate financial
impact (e.g.,
$100,001 -
$1,000,000);
potential for budget
shortfall requiring
minor adjustments.

Potential for
negative local
media attention or
stakeholder
concern; moderate
erosion of trust.

Non-compliance with
significant policies or
minor statutory
requirements;
potential for low-
level public inquiry.
4 - High
Significant
impact, major
disruption,
significant
resources
required to
manage.

Significant
disruption or failure
of critical services;
inability to meet
key mandates.

High financial
impact (e.g.,
$1,000,001 -
$10,000,000);
significant budget
deficit, requiring
major financial
intervention.

Widespread
negative media
attention; significant
loss of public trust;
political scrutiny.

Breach of significant
laws, regulations, or
constitutional
mandates; potential
for large fines,
sanctions, or
widespread public
outcry.
5 - Critical
Catastrophic
impact,
existential threat
to an
agency/program,
severe and long-
lasting
consequences.

Complete failure or
sustained inability
to deliver essential
services; poses a
threat to public
safety or welfare.

Catastrophic
financial impact
(e.g., >
$10,000,000);
severe budget
crisis, jeopardizing
long-term financial
stability.

Widespread public
outrage, severe
reputational
damage, potential
for loss of
mandates, political
fallout, loss of public
confidence in
government
function.

Major legal action,
criminal charges,
legislative
intervention, loss of
delegated authority,
impeachment
proceedings.

15 Likelihood

Score Description Probability/Frequency Qualitative Description (Public Sector Context)
1 - Rare
May occur only in
exceptional
circumstances.
< 5%
Has never happened in this
or similar public entities;
highly unlikely given current
environment.
2 - Unlikely Could occur at some
time. 5% - 20%
Has occurred in other public
sector entities, or there are
very limited indicators it could
happen here.
3 - Possible Might occur or is likely to
occur at some time. 21% - 50%
Has occurred infrequently
within this entity, or there are
known, albeit manageable,
conditions that could lead to it
(e.g., pending legislative
changes).
4 - Likely Will probably occur in
most circumstances. 51% - 80%
Has occurred multiple times
within this entity or sector;
strong indicators or trends
suggest it will occur (e.g.,
identified recurring audit
findings, persistent capacity
issues).
5 - Almost Certain Is expected to occur in
most circumstances. > 80%
Is a recurring event or a
known systemic issue within
the entity; current conditions
make it highly probable or
inevitable (e.g., critical
staffing shortages, outdated
systems, consistent public
complaints).

16 Appendix C: Possible Risks Rated1

1 Only risks rated 12 or higher are included in this report.

17 18

19 20
Appendix D: Audit Plan Task Orders

PROFESSIONAL SERVICES TASK ORDER

TASK ORDER FY27-4.42 City’s Capital Improvement Project (CIP) Management

Consultant shall perform the Services detailed below in accordance with all the terms and conditions of the Agreement referenced in Item 1A below. All exhibits referenced in Item 8 below are incorporated into this Task Order by this reference. The Consultant shall furnish the necessary facilities, professional, technical and supporting personnel required by this Task Order as described below.

CONTRACT NO. C21179340
OR PURCHASE ORDER REQUISITION NO. (AS APPLICABLE)
1A. MASTER AGREEMENT NO. (MAY BE SAME AS CONTRACT / P.O. NO. ABOVE): C21179340 1B. TASK ORDER NO.: FY27-4.42

2. CONSULTANT NAME: Baker Tilly Advisory Group, LP

3. PERIOD OF PERFORMANCE: START: September 1, 2026 COMPLETION: May 31, 2027

4. TOTAL TASK ORDER PRICE: $98,160

BALANCE REMAINING IN MASTER AGREEMENT/CONTRACT TBD

5. BUDGET CODE_______________ COST CENTER________________ COST ELEMENT______________ WBS/CIP__________ PHASE__________

6. CITY PROJECT MANAGER’S NAME & DEPARTMENT:

Julie Lythcott-Haims, Chair of the City Council’s Policy and Services Committee

7. DESCRIPTION OF SCOPE OF SERVICES (Attachment A)
MUST INCLUDE:
 SERVICES AND DELIVERABLES TO BE PROVIDED
 SCHEDULE OF PERFORMANCE
 MAXIMUM COMPENSATION AMOUNT AND RATE SCHEDULE (as applicable)  REIMBURSABLE EXPENSES, if any (with “not to exceed” amount)

8. ATTACHMENTS: A: Task Order Scope of Services B (if any): N/A

I hereby authorize the performance of the work
described in this Task Order.

APPROVED:

CITY OF PALO ALTO

BY:____________________________________
Name __________________________________
Title___________________________________
Date ___________________________________
I hereby acknowledge receipt and acceptance of
this Task Order and warrant that I have authority
to sign on behalf of Consultant.

APPROVED:

COMPANY NAME: Baker Tilly Advisory Group,
LP

BY:____________________________________
Name __________________________________
Title___________________________________
Date ___________________________________

21 Attachment A

DESCRIPTION OF SCOPE OF SERVICES
Introduction
Attachment A, the Description of Scope of Services, contains the following four (4) elements:
• Services and Deliverables To Be Provided
• Schedule of Performance
• Maximum Compensation Amount and Rate Schedule (As Applicable) • Reimbursable Expenses, if any (With “Not To Exceed” Amount)

Services & Deliverables
Baker Tilly’s approach to conducting an internal audit of the City’s Capital Improvement Project (CIP) Management involves three (3) primary steps:
• Step 1: Audit Planning
• Step 2: Fieldwork and Testing
• Step 3: Reporting

Step 1 – Audit Planning
This step consists of the tasks performed to adequately plan the work necessary to address the overall audit objective and to solidify mutual understanding of the audit scope, objectives, audit process, and timing between stakeholders and auditors. Tasks include:
• Gather information to understand the environment under review o Understand the environment under assessment
o Assess the City code, regulations, and other standards and expectations o Assess prior audit results, as applicable
o Assess additional documentation and conduct interviews as necessary • Assess the audit risk
• Prepare an audit planning memo and audit program
o Refine audit objectives and scope
o Identify the audit procedures to be performed and the evidence to be obtained and examined • Announce the initiation of the audit and kick-off meeting with key stakeholders o Discuss audit objectives, scope, audit process, timing, resources, and expectations o Discuss documentation and interview requests for the audit

Step 2 – Fieldwork and Testing
The step involves executing the procedures in the audit program to gather information, interview individuals, and analyze the data and information to obtain sufficient evidence to address the audit objectives. The preliminary audit objective is to determine (1) if the City’s Capital Improvement Project management provides adequate oversight to support the timely, coordinated, and cost-effective delivery of capital projects, and (2) determining whether projects are delivered operationally ready. Finally, the audit will evaluate the administration of CIP projects for adequate internal controls to safeguard the City from fraud, waste, and abuse. Procedures include, but are not limited to:
• Obtain and review CIP policies, procedures, governance structures, project management standards, and reporting protocols.
• Assess whether roles, responsibilities, approval authorities, and accountability mechanisms are clearly defined.
• Select a risk-based sample of completed and active CIP projects. • Compare planned versus actual schedules, budgets, scope, and deliverables to evaluate whether projects were completed timely and cost-effectively.
• Review project status reports, budget tracking tools, change orders, risk logs, and escalation procedures. • Determine whether management receives accurate, timely, and sufficient information to monitor project performance and address issues.

22 • Examine whether projects included operational readiness activities such as staff training, testing/commissioning, documentation handoff, maintenance planning, and stakeholder acceptance prior to project closeout.
• Verify whether completed projects were fully functional and capable of achieving intended operational objectives

Step 3 – Reporting
In Step 3, the project team will perform tasks necessary to finalize audit working papers, prepare and review a draft report with stakeholders, and submit a final report for management response. Tasks include:
• Developing findings, conclusions, and recommendations based on the supporting evidence gathered • Validating findings with appropriate individuals and discuss the root cause of the identified findings • Complete supervisory review of working papers and a draft audit report • Distribute a draft audit report and conduct a closing meeting with key stakeholders o Discuss the audit results, findings, conclusions, and recommendations o Discuss management responses
• Obtain written management responses and finalize a report • Review report with members of City Council and/or the appropriate Council Committee

Deliverables:

The following deliverables will be prepared as part of this engagement:
• Audit Report
• Policy & Services Committee Audit Report Presentation

Schedule of Performance
Anticipated Start Date: September 1, 2026
Anticipated End Date: May 31, 2026

Maximum Compensation Amount and Rate Schedule
The not-to-exceed maximum, inclusive of reimbursable expenses (as summarized below) for this Task is $98,160. The not- to-exceed budget is based on an estimate of 500 total project hours, of which a minimum of 50 are estimated to be completed by the City Auditor.

Reimbursable Expenses
We plan to complete all work remote including all interviews and documentation review. However, during the planning and fieldwork phases of this audit, the City and Baker Tilly may mutually determine it will be beneficial to perform a portion of the work on-site. Given this possibility, Baker Tilly could incur expenses for this Task.

The not-to-exceed maximum for reimbursable expenses for this Task is $6,500.

The following summarizes anticipated reimbursable expenses:
• Round-trip Airfare – $2,000 (1 round trip flight x 2 auditors) • Ground transportation – $800 (car rental or Uber/taxi) • Hotel accommodation – $3,000 (2 rooms x 4 nights)
• Food & Incidentals – $2,100

23 PROFESSIONAL SERVICES TASK ORDER

TASK ORDER FY27-4.44 Models/Approaches for Improving Outcomes for Individuals and Families Experiencing Homelessness

CONTRACT NO. C21179340
OR PURCHASE ORDER REQUISITION NO. (AS APPLICABLE)
1A. MASTER AGREEMENT NO. (MAY BE SAME AS CONTRACT / P.O. NO. ABOVE): C21179340 1B. TASK ORDER NO.: FY27-4.44

2. CONSULTANT NAME: Baker Tilly Advisory Group, LP

3. PERIOD OF PERFORMANCE: START: September 1, 2026 COMPLETION: May 31, 2027

4. TOTAL TASK ORDER PRICE: $60,455

BALANCE REMAINING IN MASTER AGREEMENT/CONTRACT TBD

5. BUDGET CODE_______________ COST CENTER________________ COST ELEMENT______________ WBS/CIP__________ PHASE__________

6. CITY PROJECT MANAGER’S NAME & DEPARTMENT:

Julie Lythcott-Haims, Chair of the City Council’s Policy and Services Committee

8. ATTACHMENTS: A: Task Order Scope of Services B (if any): N/A

I hereby authorize the performance of the work
described in this Task Order.

APPROVED:

CITY OF PALO ALTO

APPROVED:

COMPANY NAME: Baker Tilly Advisory Group,
LP

BY:____________________________________
Name __________________________________
Title___________________________________
Date ___________________________________

24 Attachment A

DESCRIPTION OF SCOPE OF SERVICES

Introduction
Attachment A, the Description of Scope of Services, contains the following four (4) elements:
• Services and Deliverables To Be Provided
• Schedule of Performance
• Maximum Compensation Amount and Rate Schedule (As Applicable) • Reimbursable Expenses, if any (With “Not To Exceed” Amount)

Services & Deliverables
Baker Tilly’s approach to conducting an assessment of Models/Approaches for Improving Outcomes for Individuals and Families Experiencing Homelessness involves three (3) primary steps:
• Step 1: Assessment Planning
• Step 2: Fieldwork and Testing
• Step 3: Reporting

Step 1 – Assessment Planning
This step consists of the tasks performed to adequately plan the work necessary to address the overall assessment objective and to solidify mutual understanding of the assessment scope, objectives, process, and timing between stakeholders and auditors. Tasks include:
• Gather information to understand the environment under review o Understand the environment under assessment
o Assess the City code, regulations, and other standards and expectations o Assess prior audit results, as applicable
o Assess additional documentation and conduct interviews as necessary • Prepare an assessment program
o Refine assessment objectives and scope
o Identify the procedures to be performed and the evidence to be obtained and examined • Announce the initiation of the assessment and kick-off meeting with key stakeholders o Discuss assessment objectives, scope, audit process, timing, resources, and expectations o Discuss documentation and interview requests for the assessment

Steps may include:
• Obtain and review homelessness response plans, strategic initiatives, program documentation, and performance reports from selected smaller cities.
• Identify and document homelessness intervention models implemented in comparable cities, including program design, target populations, governance structures, and service delivery approaches. • Collect and analyze outcome data, such as housing placement rates, housing retention, reductions in unsheltered homelessness, returns to homelessness, and other relevant performance measures. • Review funding sources, program costs, staffing requirements, and partnership structures to assess the financial and operational sustainability of selected models. • Conduct interviews with local officials, service providers, community organizations, and individuals with lived experience to identify perceived strengths, challenges, and lessons learned. • Compare models across selected cities and evaluate which approaches have demonstrated the most effective and sustainable outcomes, as well as the factors contributing to their success.

25 Step 3 – Reporting
In Step 3, the project team will perform tasks necessary to finalize assessment working papers, prepare and review a draft report with stakeholders, and submit a final report for management response. Tasks include:
• Developing findings, conclusions, and recommendations based on the supporting evidence gathered • Validating findings with appropriate individuals and discuss the root cause of the identified findings • Complete supervisory review of working papers and a draft assessment report • Distribute a draft assessment report and conduct a closing meeting with key stakeholders o Discuss the assessment results, findings, conclusions, and recommendations o Discuss management responses
• Obtain written management responses and finalize a report • Review report with members of City Council and/or the appropriate Council Committee

Deliverables:

The following deliverables will be prepared as part of this engagement:
• Assessment Report
• Policy & Services Committee Assessment Report Presentation

Schedule of Performance
Anticipated Start Date: September 1, 2025
Anticipated End Date: May 31, 2027

Maximum Compensation Amount and Rate Schedule
The not-to-exceed maximum, inclusive of reimbursable expenses (as summarized below) for this Task is $60,455. The not- to-exceed budget is based on an estimate of 300 total project hours, of which a minimum of 50 are estimated to be completed by the City Auditor.

Reimbursable Expenses
We plan to complete some fieldwork steps for this audit on-site if the City and Baker Tilly mutually determine it will be beneficial to perform a portion of the work on-site. Given this possibility, Baker Tilly could incur expenses for this Task.

The not-to-exceed maximum for reimbursable expenses for this Task is $6,500.

26 PROFESSIONAL SERVICES TASK ORDER

TASK ORDER FY27-4.43 City and Departmental Performance Measures

CONTRACT NO. C21179340
OR PURCHASE ORDER REQUISITION NO. (AS APPLICABLE)
1A. MASTER AGREEMENT NO. (MAY BE SAME AS CONTRACT / P.O. NO. ABOVE): C21179340 1B. TASK ORDER NO.: FY27-4.43

2. CONSULTANT NAME: Baker Tilly Advisory Group, LP

3. PERIOD OF PERFORMANCE: START: August 1, 2026 COMPLETION: February 28, 2027

4. TOTAL TASK ORDER PRICE: $85,755

BALANCE REMAINING IN MASTER AGREEMENT/CONTRACT TBD

5. BUDGET CODE_______________ COST CENTER________________ COST ELEMENT______________ WBS/CIP__________ PHASE__________

6. CITY PROJECT MANAGER’S NAME & DEPARTMENT:

Julie Lythcott-Haims, Chair of the City Council’s Policy and Services Committee

8. ATTACHMENTS: A: Task Order Scope of Services B (if any): N/A

I hereby authorize the performance of the work
described in this Task Order.

APPROVED:

CITY OF PALO ALTO

APPROVED:

COMPANY NAME: Baker Tilly Advisory Group,
LP

BY:____________________________________
Name __________________________________
Title___________________________________
Date ___________________________________

27 Attachment A

DESCRIPTION OF SCOPE OF SERVICES

Services & Deliverables
Baker Tilly’s approach to conducting an internal audit of the City and Departmental Performance Measures involves three (3) primary steps:
• Step 1: Audit Planning
• Step 2: Fieldwork and Testing
• Step 3: Reporting

Step 2 – Fieldwork and Testing
The step involves executing the procedures in the audit program to gather information, interview individuals, and analyze the data and information to obtain sufficient evidence to address the audit objectives. The preliminary audit objective is to determine if the City tracks meaningful performance measures to ensure efficiency of operations and that processes are actively monitored and managed. Procedures include, but are not limited to:
• Obtain and review policies, strategic plans, dashboards, and departmental performance management practices.
• Assess whether performance measures are clearly defined, aligned with organizational objectives, and focused on operational efficiency and effectiveness.
• Analyze a sample of departmental performance metrics to determine whether measures are meaningful, measurable, reliable, and outcome-oriented.
• Assess whether management uses appropriate benchmarks, targets, and trend analysis to evaluate performance.
• Review processes for collecting, validating, and reporting performance data. • Test a sample of reported metrics for accuracy, completeness, consistency, and supporting documentation.
• Review management reports, dashboards, meeting minutes, and corrective action processes to determine whether performance information is routinely monitored and discussed.

28 • Assess whether management takes timely action to address underperformance or operational inefficiencies.
• Interview department leadership and staff to determine how performance results are used in decision- making, resource allocation, operational planning, and process improvement initiatives. • Assess whether departments establish accountability for achieving performance targets and implementing corrective actions.
• Compare the City’s performance management processes and metrics to industry standards, peer municipalities, or recognized best practices.
• Identify opportunities to improve operational efficiency, reporting transparency, and management oversight.

Deliverables:

The following deliverables will be prepared as part of this engagement:
• Audit Report
• Policy & Services Committee Audit Report Presentation

Schedule of Performance
Anticipated Start Date: August 1, 2026
Anticipated End Date: April 30, 2027

Maximum Compensation Amount and Rate Schedule
The not-to-exceed maximum, inclusive of reimbursable expenses (as summarized below) for this Task is $85,755. The not- to-exceed budget is based on an estimate of 445 total project hours, of which a minimum of 50 are estimated to be completed by the City Auditor. We don’t plan to complete any on-site work for this engagement.

29 PROFESSIONAL SERVICES TASK ORDER

TASK ORDER FY27-4.45 Council Meeting Management

CONTRACT NO. C21179340
OR PURCHASE ORDER REQUISITION NO. (AS APPLICABLE)
1A. MASTER AGREEMENT NO. (MAY BE SAME AS CONTRACT / P.O. NO. ABOVE): C21179340 1B. TASK ORDER NO.: FY27-4.45

2. CONSULTANT NAME: Baker Tilly Advisory Group, LP

3. PERIOD OF PERFORMANCE: START: October 1, 2026 COMPLETION: March 31, 2027

4. TOTAL TASK ORDER PRICE: $53,885

BALANCE REMAINING IN MASTER AGREEMENT/CONTRACT TBD

5. BUDGET CODE_______________ COST CENTER________________ COST ELEMENT______________ WBS/CIP__________ PHASE__________

6. CITY PROJECT MANAGER’S NAME & DEPARTMENT:

Julie Lythcott-Haims, Chair of the City Council’s Policy and Services Committee

8. ATTACHMENTS: A: Task Order Scope of Services B (if any): N/A

I hereby authorize the performance of the work
described in this Task Order.

APPROVED:

CITY OF PALO ALTO

APPROVED:

COMPANY NAME: Baker Tilly Advisory Group,
LP

BY:____________________________________
Name __________________________________
Title___________________________________
Date ___________________________________

30 Attachment A

DESCRIPTION OF SCOPE OF SERVICES

Services & Deliverables
Baker Tilly’s approach to conducting an assessment of the City’s Council Meeting Management Processes includes three (3) primary steps:
• Step 1: Assessment Planning
• Step 2: Fieldwork and Testing
• Step 3: Reporting

Step 1 – Assessment Planning
This step consists of the tasks performed to adequately plan the work necessary to address the overall assessment objective and to solidify mutual understanding of the assessment scope, objectives, process, and timing between stakeholders and auditors. Tasks include:
• Gather information to understand the environment under review o Understand the environment under assessment
o Assess the City code, regulations, and other standards and expectations o Assess prior audit results, as applicable
o Assess additional documentation and conduct interviews as necessary • Prepare an assessment program
o Refine assessment objectives and scope
o Identify the procedures to be performed and the evidence to be obtained and examined • Announce the initiation of the assessment and kick-off meeting with key stakeholders o Discuss assessment objectives, scope, assessment process, timing, resources, and expectations o Discuss documentation and interview requests for the assessment

Steps include:
• Review and map the City’s council meeting planning and agenda development processes, including roles, timelines, approvals, and coordination workflows.
• Interview council members, City staff, and other stakeholders to identify challenges affecting meeting efficiency, agenda management, and execution of council priorities. • Analyze historical agendas, meeting schedules, deferred items, and supporting materials to evaluate the efficiency and effectiveness of current practices.
• Assess interdepartmental coordination, communication processes, and agenda preparation procedures to determine whether they support timely and accurate council decision-making. • Benchmark the City’s council meeting and agenda management practices against peer municipalities and governance best practices to identify improvement opportunities. • Evaluate the effectiveness of agenda management tools and develop recommendations to improve meeting efficiency, transparency, prioritization, and execution of council business.

31 Step 3 – Reporting
In Step 3, the project team will perform tasks necessary to finalize assessment working papers, prepare and review a draft report with stakeholders, and submit a final report for management response. Tasks include:
• Developing observations and recommendations based on the supporting evidence gathered • Validating observations with appropriate individuals
• Complete supervisory review of working papers and a draft assessment report • Distribute a draft assessment report and conduct a closing meeting with key stakeholders o Discuss the observations and recommendations
o Discuss management responses
• Obtain written management responses if appropriate and finalize a report • Review report with members of City Council and/or the appropriate Council Committee

Deliverables:

The following deliverables will be prepared as part of this engagement:
• Assessment Report
• Policy & Services Committee Assessment Report Presentation

Schedule of Performance
Anticipated Start Date: July 1, 2026
Anticipated End Date: January 31, 2027

Maximum Compensation Amount and Rate Schedule
The not-to-exceed maximum, inclusive of reimbursable expenses (as summarized below) for this Task is $53,885. The not- to-exceed budget is based on an estimate of 280 total project hours, of which a minimum of 35 are estimated to be completed by the City Auditor.

Reimbursable Expenses
We plan to complete all work remotely including all interviews and documentation review. However, during the planning and fieldwork phases of this assessment, the City and Baker Tilly may mutually determine it will be beneficial to perform a portion of the work on-site. Given this possibility, Baker Tilly could incur expenses for this Task.

The not-to-exceed maximum for reimbursable expenses for this Task is $6,500.

32 PROFESSIONAL SERVICES TASK ORDER

TASK ORDER FY27-4.46 AI Governance & Usage Best Practices & Pit Falls

CONTRACT NO. C21179340
OR PURCHASE ORDER REQUISITION NO. (AS APPLICABLE)
1A. MASTER AGREEMENT NO. (MAY BE SAME AS CONTRACT / P.O. NO. ABOVE): C21179340 1B. TASK ORDER NO.: FY27-4.46

2. CONSULTANT NAME: Baker Tilly Advisory Group, LP

3. PERIOD OF PERFORMANCE: START: August 1, 2026 COMPLETION: January 31, 2027

4. TOTAL TASK ORDER PRICE: $63,815

BALANCE REMAINING IN MASTER AGREEMENT/CONTRACT TBD

5. BUDGET CODE_______________ COST CENTER________________ COST ELEMENT______________ WBS/CIP__________ PHASE__________

6. CITY PROJECT MANAGER’S NAME & DEPARTMENT:

Julie Lythcott-Haims, Chair of the City Council’s Policy and Services Committee

8. ATTACHMENTS: A: Task Order Scope of Services B (if any): N/A

I hereby authorize the performance of the work
described in this Task Order.

APPROVED:

CITY OF PALO ALTO

APPROVED:

COMPANY NAME: Baker Tilly Advisory Group,
LP

BY:____________________________________
Name __________________________________
Title___________________________________
Date ___________________________________

33 Attachment A

DESCRIPTION OF SCOPE OF SERVICES

Services & Deliverables
Baker Tilly’s approach to conducting an assessment of the AI Governance & Usage Best Practices & Pit Falls includes three (3) primary steps:
• Step 1: Assessment Planning
• Step 2: Fieldwork and Testing
• Step 3: Reporting

Step 1 – Assessment Planning
This step consists of the tasks performed to adequately plan the work necessary to address the overall assessment objective and to solidify mutual understanding of the assessment scope, objectives, process, and timing between stakeholders and auditors. Tasks include:
• Gather information to understand the environment under review o Understand the environment under assessment
o Assess the City code, regulations, and other standards and expectations o Assess prior audit results, as applicable
o Assess additional documentation and conduct interviews as necessary • Prepare an assessment program
o Refine assessment objectives and scope
o Identify the procedures to be performed and the evidence to be obtained and examined • Announce the initiation of the assessment and kick-off meeting with key stakeholders o Discuss assessment objectives, scope, assessment process, timing, resources, and expectations o Discuss documentation and interview requests for the audit

Steps include
• Review existing City policies, procedures, and governance structures related to AI, data management, cybersecurity, privacy, procurement, and technology oversight. • Interview City leadership, IT staff, legal counsel, department representatives, and other stakeholders to understand current and planned AI usage, operational needs, and governance concerns. • Assess how AI technologies are currently being used or evaluated across departments, including controls related to data privacy, security, transparency, accuracy, and human oversight. • Evaluate employee training, awareness, and acceptable use practices to determine whether staff are adequately prepared to responsibly and effectively use AI tools. • Benchmark the City’s AI governance, risk management, and training practices against peer municipalities, industry standards, and emerging regulatory guidance to identify leading practices and gaps.
• Identify key risks associated with AI adoption—including cybersecurity, data privacy, bias, legal liability, misinformation, and operational dependency—and develop recommendations to support responsible AI governance and implementation.

34 Step 3 – Reporting
In Step 3, the project team will perform tasks necessary to finalize assessment working papers, prepare and review a draft report with stakeholders, and submit a final report for management response. Tasks include:
• Developing observations and recommendations based on the supporting evidence gathered • Validating observations with appropriate individuals
• Complete supervisory review of working papers and a draft assessment report • Distribute a draft assessment report and conduct a closing meeting with key stakeholders o Discuss the observations and recommendations
o Discuss management responses
• Obtain written management responses if appropriate and finalize a report • Review report with members of City Council and/or the appropriate Council Committee

Deliverables:

The following deliverables will be prepared as part of this engagement:
• Assessment Report
• Policy & Services Committee Assessment Report Presentation

Schedule of Performance
Anticipated Start Date: August 1, 2026
Anticipated End Date: January 31, 2027

Maximum Compensation Amount and Rate Schedule
The not-to-exceed maximum, inclusive of reimbursable expenses (as summarized below) for this Task is $63,815. The not- to-exceed budget is based on an estimate of 315 total project hours, of which a minimum of 35 are estimated to be completed by the City Auditor.

Reimbursable Expenses
We plan to complete all work remote including all interviews and documentation review. However, during the planning and fieldwork phases of this assessment, the City and Baker Tilly may mutually determine it will be beneficial to perform a portion of the work on-site. Given this possibility, Baker Tilly could incur expenses for this Task.

The not-to-exceed maximum for reimbursable expenses for this Task is $6,500.

35 PROFESSIONAL SERVICES TASK ORDER

TASK ORDER FY27-4.47 Employee Mental Health & Wellness

CONTRACT NO. C21179340
OR PURCHASE ORDER REQUISITION NO. (AS APPLICABLE)
1A. MASTER AGREEMENT NO. (MAY BE SAME AS CONTRACT / P.O. NO. ABOVE): C21179340 1B. TASK ORDER NO.: FY27-4.47

2. CONSULTANT NAME: Baker Tilly Advisory Group, LP

3. PERIOD OF PERFORMANCE: START: October 1, 2026 COMPLETION: May 31, 2027

4. TOTAL TASK ORDER PRICE: $60,455

BALANCE REMAINING IN MASTER AGREEMENT/CONTRACT TBD

5. BUDGET CODE_______________ COST CENTER________________ COST ELEMENT______________ WBS/CIP__________ PHASE__________

6. CITY PROJECT MANAGER’S NAME & DEPARTMENT:

Julie Lythcott-Haims, Chair of the City Council’s Policy and Services Committee

8. ATTACHMENTS: A: Task Order Scope of Services B (if any): N/A

I hereby authorize the performance of the work
described in this Task Order.

APPROVED:

CITY OF PALO ALTO

APPROVED:

COMPANY NAME: Baker Tilly Advisory Group,
LP

BY:____________________________________
Name __________________________________
Title___________________________________
Date ___________________________________

36 Attachment A

DESCRIPTION OF SCOPE OF SERVICES

Services & Deliverables
Baker Tilly’s approach to conducting an assessment of the Employee Mental Health & Wellness includes three (3) primary steps:
• Step 1: Assessment Planning
• Step 2: Fieldwork and Testing
• Step 3: Reporting

Step 1 – Assessment Planning
This step consists of the tasks performed to adequately plan the work necessary to address the overall assessment objective and to solidify mutual understanding of the assessment scope, objectives, process, and timing between stakeholders and auditors. Tasks include:
• Gather information to understand the environment under review o Understand the environment under assessment
o Assess the City code, regulations, and other standards and expectations o Assess prior audit results, as applicable
o Assess additional documentation and conduct interviews as necessary • Prepare an assessment program
o Refine assessment objectives and scope
o Identify the procedures to be performed and the evidence to be obtained and examined • Announce the initiation of the assessment and kick-off meeting with key stakeholders o Discuss assessment objectives, scope, assessment process, timing, resources, and expectations o Discuss documentation and interview requests for the assessment

Step 2 – Fieldwork and Testing
The step involves executing the procedures in the assessment program to gather information, interview individuals, and analyze the data and information to obtain sufficient evidence to address the assessment objectives. The preliminary objective is to determine what are the most effective processes and programs to support employee mental health, wellness, and resilience in high-stress work environments. Steps include • Review existing City policies, programs, and resources related to employee mental health, wellness, resilience, critical incident support, and workplace safety. • Interview employees, supervisors, Human Resources staff, union representatives, and department leadership to identify workforce stressors, program needs, utilization barriers, and organizational culture concerns.
• Assess the availability, accessibility, and effectiveness of wellness resources such as employee assistance programs, peer support, counseling services, wellness training, and stress management initiatives. • Evaluate how the City supports employees in high-stress work environments through workload management, supervisor training, incident response protocols, leave practices, and return-to-work processes.
• Benchmark the City’s employee wellness and resilience practices against peer municipalities, public safety organizations, and industry best practices to identify effective strategies and program gaps. • Identify opportunities to improve employee mental health support, reduce burnout and turnover risks, strengthen organizational resilience, and promote a healthy and sustainable work environment.

37 Step 3 – Reporting
In Step 3, the project team will perform tasks necessary to finalize assessment working papers, prepare and review a draft report with stakeholders, and submit a final report for management response. Tasks include:
• Developing observations and recommendations based on the supporting evidence gathered • Validating observations with appropriate individuals
• Complete supervisory review of working papers and a draft assessment report • Distribute a draft assessment report and conduct a closing meeting with key stakeholders o Discuss the observations and recommendations
o Discuss management responses
• Obtain written management responses if appropriate and finalize a report • Review report with members of City Council and/or the appropriate Council Committee

Deliverables:

The following deliverables will be prepared as part of this engagement:
• Assessment Report
• Policy & Services Committee Assessment Report Presentation

Schedule of Performance
Anticipated Start Date: October 1, 2026
Anticipated End Date: May 31, 2027

Maximum Compensation Amount and Rate Schedule
The not-to-exceed maximum, inclusive of reimbursable expenses (as summarized below) for this Task is $60,455. The not- to-exceed budget is based on an estimate of 300 total project hours, of which a minimum of 40 are estimated to be completed by the City Auditor.

Palo Alto City CouncilAugust 10, 2026

Palo Alto City Council
August 10, 2026